Ether price is up today, but a dip toward $2,500 in the coming weeks due to a classic bearish continuation setup could spoil the relief rally.
Ethereum’s Ether ETH$3,428.48 token has jumped by approximately 3% in the last 24 hours to reach around $3,430 on Dec. 24.
The gains align with a broader upward trend across the altcoin market as Bitcoin’s BTC $ 94,729 price consolidates near $94,000. Meanwhile, Ether’s intraday surge coincides with renewed capital inflows into US-based spot Ethereum exchange-traded funds (ETFs).
Bitcoin dominance signals ETH, altcoin season
Ether’s gains over the past 24 hours coincide with Bitcoin’s sharpest daily underperformance against the broader altcoin market in 2024.
Notably, the Bitcoin Dominance Index (BTC.D), a metric that tracks BTC’s market capitalization weight against the rest of the crypto market, fell 1.84% on Dec. 23, marking its worst daily return since January 2024.
At the same time, Ethereum’s market dominance (ETH.D) climbed by 2.65%, suggesting that most capital outflows from Bitcoin were being redirected toward the Ether market.
Historically, such movements mark the start of an “altcoin season,” during which larger altcoins like Ether outperform Bitcoin.
Independent market analyst Mister Crypto has highlighted a potential shift in the cryptocurrency market, suggesting that Bitcoin’s market dominance could decline further in the coming weeks.
His analysis is based on Bitcoin Dominance Index (BTC.D) data, which recently fell below a long-term ascending trendline. This breakdown pattern resembles the 2021 market cycle, which marked the beginning of a major altcoin season.
Notably, the breakdown in 2021 occurred 31 bars, or 217 days, after Bitcoin’s halving event, triggering a significant rotation of capital into the altcoin market. A similar pattern is now unfolding, with BTC.D breaking down 31 bars after the most recent halving, reinforcing the historical similarity.
Ethereum ETF inflows resume
Ether’s price rally today is closely tied to the resurgence of ETF inflows and optimistic predictions about Ethereum’s growth prospects.
On Dec. 23, a day ago, these funds attracted $130.8 million in inflows, nearly offsetting the outflows they experienced over the previous two days, according to Farside Investors data.
Overall, US ETFs collectively witnessed $1.47 billion in inflows in December, marking their best month since their debut in July.
On Dec. 19, Nate Geraci, president of the ETF Store, noted that Ethereum ETFs are currently pacing similarly to the early adoption phase of gold ETFs, which debuted in November 2004.
He said inflows into Ethereum ETFs could accelerate significantly in the near future as investor interest grows.
Ethereum bear pennant persists
Ether’s price rise today is part of a consolidation trend occurring inside what appears to be a bear pennant.
Bear pennants are triangle-like structures that appear during downtrends. They typically resolve when the price breaks below the lower trendline and drops by as much as the size of the previous decline.
As of Dec. 24, ETH’s price was bouncing after testing the pennant’s lower trendline support. Interestingly, the support area—aligning with the $3,250-3,350 range—has had a history of high trading activity, according to its Volume Profile.
The price is now eyeing a close below the lower trendline. If this occurs, the price can decline toward $2,525 by late December or early January 2025.
Conversely, a breakout above the triangle’s upper trendline will most likely invalidate the bearish setup.
Instead, such a move could send Ether’s price over $3,500 to target the 50-4H exponential moving average (50-4H EMA; the red wave) and the 200-4H EMA (the blue wave).
Risk Disclaimer
Although Sponsored Trading can be profitable, it is associated with a significant risk of losing your investment. The risks will increase when trading on margin companies. Traders must exercise due diligence and be careful when making their trading decisions. It is the sole responsibility of the Trader to learn and acquire the knowledge and experience required to use the Trading Platform and anything that will be required to trade properl
